Highlights of 2009 • Net profit of € 227.9 million • Record revenue of € 2.2 billion • Order book steady at high level: € 2.9 billion • Earnings per share € 2.31; proposed dividend € 1.19 per share
Outlook for 2010 • Market conditions remain challenging • Well-filled and broadly spread order book provides solid basis
In 2009 the net profit of Royal Boskalis Westminster N.V. fell to € 227.9 million (2008: € 249.1 million). Revenue was a record € 2.2 billion (€ 2008: 2.1 billion) and was widely spread, both geographically and across all market segments.
The net profit figure of € 227.9 million includes: • a € 35.3 million exceptional gain on the stake held in Smit Internationale N.V. (Smit) and • an exceptional impairment charge of € 39.7 million (after tax) relating to the older part of the fleet.
In 2009 Boskalis was awarded new orders worth € 1.8 billion. As a result, Boskalis was able to end the year with a strong order book of € 2.9 billion, even with a record revenue and amid difficult market conditions.
Peter Berdowski, CEO: “2009 was an excellent year for Boskalis despite the difficult market conditions. We have thereby benefitted from our broadly spread and well-filled order book, an adequate execution of the projects and our disciplined contracting policy. In addition, over the past year we were successful in acquiring projects in the high end of our markets in, amongst other regions, Australia and South America. The global recession has also affected our industry and although to date the impact on Boskalis has been limited, we are preparing ourselves for lower volumes of work and lower margins. The implementation of our fleet rationalization program will improve our cost structure and thereby boost our position in the market. Despite the current market conditions we look forward to 2010 with confidence in the light of our well-filled order book and the fleet rationalization program we have launched.” Market developments The global market for dredging and maritime infrastructure is driven by factors such as growth in world trade, the global population, energy consumption and the effects of climate change. Following a period of robust growth, this growth trend came to an end in late 2008.
While the structural long-term growth factors for dredging and maritime infrastructure remain positive, the short-term outlook has become markedly less certain since early 2009, as a consequence of a lower oil price, lower demand for natural resources and stagnating global trade.
This deterioration in market conditions has clearly had a visible impact on our products and services. Customers are taking a critical look at their plans, the award of projects is taking longer and margins in certain of our markets are under pressure. However, there are large differences between the positions of our customers both in geographical terms and by market segment: Oil & Gas, Ports or Coastal Protection/Land Reclamation.
Outlook After years of boisterous growth the prospects for the dredging industry have clearly deteriorated. Boskalis faces this challenge with a strong and well-filled order book which ensures a well utilized fleet for 2010. The fleet rationalization program will enable Boskalis to part with older vessels in the fleet.
Boskalis is committed to maintaining a solid financial position and this position will continue to be strong after the intended merger with Smit, partly thanks to last December’s successful equity issue. Boskalis is in the final phase of a long-term capital expenditure program, meaning that the investment level will decline over the next few years. In the next two years we expect annual capital expenditure of around € 150-200 million (excluding Smit).
Given the project-based nature of our work and the uncertain market conditions, we are unable at this point in time to provide a quantitative forecast for 2010. We do, however, anticipate that 2010 earnings will be lower than the level achieved in 2009, disregarding the effects of the potential completion of the merger with Smit.
Dividend policy and proposal The main principle of the Boskalis dividend policy is to distribute 40% to 50% of net profit from ordinary operations as dividend, whereby Boskalis aims to achieve a stable development of the dividend for the longer term. The choice of dividend form (in cash and/or entirely or partly in shares) takes into account the company’s desired balance sheet structure and the interests of shareholders.
In light of this, Boskalis will propose to the Annual General Meeting of Shareholders on May 12, 2010 that a dividend of € 1.19 per share be distributed in the form of ordinary shares, unless the shareholder opts for a cash dividend. The dividend will be payable from June 9, 2010.